If a person is asked to imagine a stress-free life, there is a list of things that come to mind. And becoming financially independent is definitely one of those factors. Today’s generation is constantly fluctuating between the thought process of ‘I have to start saving!’ and ‘You only live once!’. But, at some point, everyone realizes the importance of investing or saving for future expenses. There are hundreds of financial schemes and instruments available to investors to build a long-term corpus. There are also avenues that can provide short-term gains or a steady income stream, depending on individuals’ investment goals. In this article, we will take a close look at the factors one should consider for a financially secure life.
Plan for life after retirement
People who have just started their career or who are between the ages of 25 and 30 may feel that they can plan for their retirement life later in their career. However, they tend to forget that retirement life could be 15-20 years, in which one might not have a steady stream of active income. To cover expenses, especially medical and health care expenses, investors have to plan ahead through retirement plans. Options such as the Public Provident Fund, the Savings Plan for the Elderly, Kisan Vikas Patra, the National Pension Plan benefit investors with better interest rates than time deposits.
Start saving or investing early
The benefits that one could receive by investing early are beyond the expectations of a common individual. For example, a person could even have double the amount at age 60, if he starts investing at 25 instead of 30 (subject to rate of return). This is solely because the power of compounding is very effective in the post-investment stages. Also, this gives enough time to take risks and receive higher returns.
Get medical/health insurance coverage
Getting health insurance is taken lightly by most people. Getting insurance at an early stage provides the benefit of paying a lower insurance premium than later in life.
Learn to plan taxes
Most of us have complained that schools don’t teach about taxes. But one must take responsibility for learning how to plan for income and other taxes. There are multiple provisions in the Income Tax Act 1961 through which deductions can be claimed from taxable income.
Diversify the investment portfolio
The risk differs from person to person. But too much risk could be cynical for investments made over several years. Therefore, risks should be diversified by investing in different assets like stocks, debt, commodities like gold, and other risk-free sovereign schemes. This ensures that the built corpus does not erode.
Invest in development projects online
A development project is a project generally financed by a bilateral, multilateral or private donor. The goal is to improve the socioeconomic status (GDP) of a country and improve the living conditions and standard of living of local residents (GNP) in that country. Therefore, it is very common for multiple donors to co-finance a project. Financing has always been a challenge for small and medium-sized businesses. And the situation only got worse five years ago when the banks began to tighten and reduce the loans they made. Most banks only collaborate with companies with a specific track record. So if you’re just starting an e-commerce business, or if the terms of a traditional loan are too harsh, you should know that there are other options to help you finance your e-commerce project as well. Personal savings should be measured when your return on money is very low and borrowing costs are high. If you are thinking of withdrawing your savings from your pension system, it is important that you study the penalty for the amount withdrawn. Therefore, be wise when choosing among your options and decide carefully.
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Source: vtt.edu.vn